Why Are Honest Company Shares Trading Lower Today

Honest Company Inc HNST reported fourth-quarter FY21 sales growth of 3% year-on-year, to $80.38 million, missing the consensus of $84.59 million.
The revenue increase was driven by strong volume growth in Skin and Personal Care and Diapers and Wipes product categories.
Diapers and Wipes revenue rose 16% Y/Y, Skin and Personal care grew 26%, and Household & Wellness declined 68%.
Revenue through digital channel increased 17%, representing 51% to total revenue, whereas Retail fell 8% and constituted 49% of revenue.
The gross margin contracted by 360 basis points Y/Y to 30%.
The operating loss for the quarter narrowed to $(8.6) million.
EPS loss of $(0.10) missed the analyst consensus of $(0.06).
The company held $93.2 million in cash and equivalents as of December 31, 2021.
The company expects inflation and supply chain headwinds to continue to challenge the industry.
Outlook: Honest sees FY22 revenue to be flat Y/Y.
The company expects FY22 adjusted EBITDA loss of $(10) million - $(5) million.
The company expects Q1 revenue to decline by approximately 15% Y/Y, with subsequent three quarters to see mid-single-digit growth., with
Price Action: HNST shares are trading lower by 19.2% at $4.88 in premarket on the last check Friday.

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